MILAN, ITALY —
The economic crisis in Europe is deeply felt in the northern and more developed part of Italy, where entrepreneurs are suffering from a lack of credit and a decreasing number of customers. To overcome the crisis, some businesses are seeking Chinese investment, like the owner of CB Ferrari.

When Renato Bianchi founded the company in the late 1960s the Italian economy was booming. Over the next four decades his company grew from a handful to about 160 employees.

But when the global economic crisis hit, in the mid-2000s, orders began to decrease and Bianchi said he started losing more than a million dollars of business a year.

“I thought we had to change businesses, because we could not make it," he said. "Either we started doing something else, or we sell the company. Our competitors, Swiss, German and Italian companies, were all very interested in buying. We started having talks with all of them, and the amount of money they were willing to spend was considerable.”

But instead Bianchi chose to sell to a Chinese company. For less money, he said, but with one important guarantee.

“The best thing about the deal was that they would leave the company as it were. The Chinese company was okay with keeping the managers and the workers. And that for me was very important, it meant that I was not betraying my workers, my people," Bianchi said.

CB Ferrari produces automated precision machines that make turbines for the auto, aeronautical and energy industries.

The Chinese state-owned company that purchased Bianchi’s company makes similar, but much less sophisticated, machines. Chinese companies are looking for an upgrade in Europe, said economist Roberta Rabellotti.

“Just like Marco Polo went to China and brought back technological innovation, in this case it’s the Chinese who are coming to Europe, to Italy, and need to acquire intangible assets, like knowledge, managerial skills," she said. "But in this case it’s the other way around, which we call the reverse Marco Polo effect.”

Although it is advanced in its industries, Italy has a highly bureaucratic business environment which often works against foreign investment. It ranked lower than many developing countries in a World Bank survey that assessed the ease of doing business globally.

This is why Italy has traditionally attracted less investment from China than other European neighbors, Rabellotti said. But the economic crisis is changing that.

“In Italy there are a lot of companies in crisis," she said. "Capital is needed and China has that capital. Many entrepreneurs here are in extreme difficulties, and do not see an alternative solution to selling.”

But Rabellotti said fear of what she called “robbery investment” remains high in Italy.

“There is negative rhetoric around Chinese, and that is precisely because there are many examples of purchases that end up with transfer of technology and closed operation, so the fear is legitimate.”

The best way to fight that fear, Rabellotti said, is to show that there are positive examples, where Chinese investment helped develop the local economy.